Business News

Mumbai: Overseas investors sold Indian equities worth ₹20,564 crore across 18 sectors between February 16 and 28, according to data from NSDL.The automobile sector witnessed the highest outflows in the second-half of the month as these investors dumped shares worth ₹3,279 crore after selling to the tune of ₹690 crore in the first-half of the month. In 2024, foreign investors pulled out over ₹16,000 crore from the sector."The tariffs being imposed by the US are likely to affect the auto sector, making it difficult to maintain exports and in addition, the valuations in the sector had also run up last year," said U R Bhat, co-founder, Alphaniti. "This is likely to have driven the foreign selling in the sector."Healthcare and fast-moving consumer goods (FMCG) sectors saw outflows of ₹2,996 crore and ₹2,568 crore, respectively. While they purchased shares worth ₹1,534 crore in the healthcare sector in the first 15 days of the month, they sold shares worth over ₹4,000 crore in the FMCG sector.Bhat said that since healthcare also has a significant exposure to the US, the tariffs have dampened foreign sentiment on this segment as well."The demand has not picked up in the FMCG sector as anticipated and the expensive valuations are expected to have led to outflows," said Bhat. 118771907Financial services faced the maximum brunt of foreign selling this year, but witnessed some respite as the pace of selling came down in the second-half of February.Overseas investors offloaded shares worth Rs 1,647 crore after divesting Rs 24,949 crore worth shares in the sector in January. “Most large private banks and NBFCs have performed well, led by recent measures taken by the RBI to improve liquidity,” said Saurabh Patwa, portfolio manager and head of research, Quest Investment. The worst of the asset quality issues in personal credit is nearing to bottom out which is also supportive for the sector, he said. Foreign investors sold shares worth Rs 1,820 crore in the construction materials sector and withdrew over Rs 1,200 crore from capital goods, consumer durables and power sector in the second half of the month. Overseas investors pumped Rs 7,261 crore across five sectors, with the telecommunication sector witnessing the highest inflows worth Rs 5,661 crore after they bought shares worth Rs 2,337 crore in the first half of the month. Promoter Group Indian Continent Investment Limited sold shares of Bharti Airtel worth Rs 8,485 crore in a block deal on February 18. Analysts said that the change in shareholding in telecom major, Bharti Airtel has led to the infusion of foreign funds in the sector in the second half of the month. Global investors purchased shares worth Rs 1,362 crore and Rs 112 crore respectively in sectors earmarked as ‘Others’ and Information Technology (IT). “In the next one month or so, easing of the US dollar and some finality in terms of Trump’s trade tariffs, as also a potential peace deal, could spark a risk-on sentiment on emerging markets among overseas investors,” said Bhat. These factors are likely to stabilise over the next month or so and some inflows in India can be anticipated as it is relatively better placed, he said. “It is difficult to ascertain the near-term direction of foreign flows despite valuations turning fairly attractive in some sectors given the uncertainty at macro level creating volatility at currency level as well as crude impacting several businesses in the near term”, said Patwa.

Washington: The Trump administration's rapid efforts to dramatically shrink the size of the federal government have economists rethinking forecasts for another solid year of labour market expansion in 2025.Already, Bloomberg Economics estimates tens of thousands of federal jobs have been cut in the six weeks since President Donald Trump took office. Comerica Bank, Evercore ISI and Barclays are among firms who say total job losses could top half a million by the end of the year.That number, which includes knock-on effects in the private sector, would effectively reverse a quarter of all job growth in 2024. The government's monthly report on US employment for February due Friday may show limited signs of the damage, though the impact is set to become more apparent in March and April."If these numbers on federal workers turn out to be accurate, and if you include the grantees and the contracts, these numbers are going to be significant," said Harry Holzer, a Georgetown University professor and former Labor Department chief economist. A report published Thursday by the outplacement firm Challenger, Gray & Christmas showed job cuts announced by employers rose last month to the highest level since 2020, and weekly data on filings for unemployment insurance showed a surge in claims from laid-off federal workers.

Washington: The US trade deficit surged to a new record in January, government data showed Thursday, as imports spiked while tariff worries flared in the month of President Donald Trump's inauguration.Trump returned to the White House this year with pledges to ease cost-of-living pressures for voters, but on the campaign trail he also raised the possibility of sweeping levies across US imports.The overall trade gap of the world's biggest economy ballooned 34 percent to $131.4 billion, on the back of a 10 percent jump in imports for the month, said the Commerce Department.This was the widest deficit for a month on record, dating back to 1992, and the expansion was more than analysts anticipated.The latest figures came after the US economy saw its goods deficit hit a fresh record too for the full year of 2024 -- at $1.2 trillion.In January, imports came in at $401.2 billion, and this was $36.6 billion more than the level in December, Commerce Department data showed.US exports, meanwhile, rose $3.3 billion between December and January to $269.8 billion.Among sectors, imports of industrial goods jumped, and imports of consumer goods rose notably by $6.0 billion.Tariff jittersAnalysts say that the deficit was likely bolstered by gold imports.But "stripping out this impact, all other imports rose 5.5 percent, indicating front-loading of shipments was in full swing," said Oxford Economics senior economist Matthew Martin.This refers to a tendency for businesses to try and get ahead of additional costs from potential tariffs, as well as possible supply chain disruptions down the line."The impact of new tariff proposals make the outlook uncertain," Martin said.Economists Samuel Tombs and Oliver Allen of Pantheon Macroeconomics said of the surge in gold imports: "Tariff threats are reportedly prompting a mass repatriation of gold holdings to the US from elsewhere, mostly via Switzerland."But other analysts like Carl Weinberg and Mary Chen of High Frequency Economics caution that they are looking for a "snapback in imports" in February and March figures to show if importers are truly seeking to get ahead of Trump's levies."It is hard to prove that," they said in a note.US deficits with other economies were a key focus of Trump's first administration from 2017 to 2021, and at the time he waged a bruising tariffs war with China in particular.This time the Trump administration has referred to tariffs as a means to raise government revenue, remedy imbalances and exert pressure on other governments over American priorities.In January, US goods deficits with China and the European Union both widened.On the campaign trail last year ahead of November's election, Trump vowed reciprocal tariffs on nations that taxed US-made products, dubbing this the "Trump Reciprocal Trade Act."Since returning to office, the Republican has launched plans for "reciprocal tariffs" tailored to each US trading partner, to tackle trade practices deemed unfair by Washington.He has promised an announcement on these levies on April 2, while also threatening tariffs on other imports ranging from semiconductors to autos.Trump hiked tariffs on steel and aluminum imports in his first presidential term too -- an action he has revived since returning to office.A sharp 25 percent levy on the metals is set to take effect this month.